"This can have a meaningful impact on corporate earnings here in the U.S. So you are largely seeing a repricing of the U.S. markets based on that," McMillan said.

The Republicans' tax plan is expected to add $1.4 trillion over 10 years to the $20 trillion national debt to finance changes that they say would further boost an already growing economy.

The Dow Jones Industrial Average rose 238.71 points, or 0.99 percent, to 24,470.3, the S&P 500 gained 13.61 points, or 0.52 percent, to 2,655.83 and the Nasdaq Composite dropped 25.64 points, or 0.37 percent, to 6,821.95.

Some of the biggest gainers were from areas expected to benefit from a lower corporate tax rate. The S&P 500 banks index surged 2.5 percent, while the Dow Jones Transport Average index jumped 2.7 percent.

The dollar rose against a basket of currencies after the tax package moved forward.

The dollar index rose 0.35 percent, with the euro down 0.29 percent to $1.1854. The Japanese yen weakened 0.60 percent versus the greenback at 112.80 per dollar.

"Dollar bulls are pinning their hopes on the sweeping tax deal leading to a more rapid pace of interest rate hikes from the Federal Reserve," said Jake Spark, U.S. corporate hedging manager at Western Union Business Solutions, in Washington.

Benchmark 10-year notes last fell 9/32 in price to yield 2.3937 percent, from 2.363 percent late on Friday.

Oil fell as the market saw signs of continuing U.S. production increases, though prices remained in sight of their recent two-year highs thanks to last week's decision by OPEC and other producers to extend output cuts.

U.S. crude fell 1.03 percent to $57.76 per barrel and Brent was last at $62.95, down 1.22 percent on the day.